Neste Oyj (NESTE) Earnings Call Transcript & Summary

[Presentation]

Distinguished shareholders of Neste, ladies and gentlemen's. I am the Chairman of the Board of Directors, Matti Kahkonen, and it is my honor to open this Annual General Meeting of 2023 of Neste Corporation and warmly welcome you on behalf of the entire Board. It is actually very nice to meet you all once again, face to face, here after several years of the pandemic. I opened the meeting in a global situation with the wars to be continuous in Ukraine. And I wish to emphasize that Neste, like many other businesses and private citizens condemns the attack of Russia, violating international law and the principle of human rights. During the past year, our visibility into the world economy has been poor. It will remain poor due to high inflation, decline growth expectations and continuing geopolitical uncertainty. However, I'm glad to be able to say that in 2022, the company has been successful in its operations in this challenging environment. The members of the Neste Board of Directors are shown in this picture, and the majority of Board members are present here, John Abbott, Nikolas Elmslie, Johanna Soderstrom, Marco Wiren, Just Jansz, and Eeva Sipila. Jari Rosendal and Martina Floel were not able to attend this time. Myself, I have been both the Chair of the Personal Remuneration Committee and the Chair of the Board of Directors and as a member of the Shareholders' Nomination Board. All Board members and our principal auditor, Leenakaisa Winberg, chartered public accountant from KPMG Oy Ab are independent of Neste Corporation and its major shareholders. Members of the company's executive committee are also present as well as President and CEO, Matti Lehmus, who will later present his business review later in this meeting. The key task of Neste's Board of Directors is to guide the group strategy so that the peak conditions for meeting the financial objectives set for the group and creating shareholder value in the long term while taking into account the expectations of various stakeholders, not taking into account. In 2022, the Board elected Matti Lehmus as the Company President and CEO, starting of 1st of May 2022. The Board focused on the company's long-term strategy by means of, for instance, the continued scale-up of company's renewables businesses as well as expanding the company's renewables fixed platform and production capabilities. Including also the decision to establish the joint operation with the margin as renewables in the U.S., the finance -- final investment decision concerning the Rotterdam expansion and continuously monitoring the ongoing Singapore expansion project. Feedstock growth related marketing and advertising and other investment topics were also on the Board agenda last year. The Board also constantly monitor the company's safety performance, financial performance, risk management and sustainability. Further, the Board closely monitor long and short-term changes of our operating environment and evaluated the impact on business. In particular, on the agenda, where high inflation, decline expectations of growth and geopolitical uncertainty and its impacts. The Board also discussed general incompetencies and leadership management as well as matters related to company's management, including changes in senior management that we announced during 2022. The evaluation of both activities also comprised its own performance and how to manage the growth of international business. The Board in 2022 was facing a very challenging operating environment. And later, I will speak about remuneration and our proposal for dividends during this meeting. Shareholders, ladies and gentlemen, I'd like to thank you for showing your trust in Neste by investing in your bonds and its shares. I'd also like to thank all you present here and those who voted in advance for participating in important decisions belonging to the Annual General Meeting. I declare the Annual General Meeting has been opened and I proposed that attorney Jukka Laitasalo be appointed the Chair of the meeting. Any other proposals, unless none. Therefore, I note that Jukka Laitasalo has been nominated as Chairperson, I'll give the floor to him.

Distinguished shareholders, welcome on my behalf, I thank you for the confidence and I can say that it is pleasant again to be in front of a live audience and not in front of a video camera only. Let's have a good meeting today and traditional calling the meeting to order. I have the power to call General Counsel of the company, Christian Stahlberg, to act as Secretary of this meeting. Christian, please come forward. And then general housekeeping. The meeting will be held in Finnish, there is simultaneous interpretation into English. And if you need headphones, please turn to the meeting staff. They will provide you with that. It is also possible to follow this AGM online via the webcast. If you follow this online, it is not possible to ask questions or make counterproposals or ask [ before ] for other comments on vote, so following the AGM via the webcast is not considered as participation in the AGM. The agenda, the notice, the remuneration report and the financial statements are available at the chair's desk and also the list of shareholders that is required by the Companies Act should be kept here, and you can see that you are clear at desk. If you wish to take the floor today, please state your name and the shareholder you may represent and the number of your voting card or the number of your participation card. Should you leave this room during the meeting, before it closes, please hand over your voting card to the meeting officials so that's -- at their reception desk so that they can update the list of votes accordingly. And I would like to ask you to switch off your mobile phones or put them to a silent mode at least for the whole duration of the meeting. The organizers will video record this meeting. So any other photography is not allowed during the meeting. About advanced voting, Neste is now using this procedure for the first time. Shareholders with the Finnish book entry account have been able to exercise their voting rights by voting in advance between February 8 and March 20. So shareholders who voted, if there is a vote on the spot and there are shareholders in the meeting who have already voted in advance but they would like to change their vote as opposed to what they already voted in advance. Those shareholders have a possibility to ask for a voting card instead of the participation card, and the item in question. But then you should remember that collecting the voting card, the earlier votes of the shareholders will be annulled on the agenda item and all subsequent points on the agenda. And that's on the remaining items, the shareholders should need to vote in the same way as those who have not cast their votes. Nominated shareholders have had the opportunity to participate in advanced voting via their account managers and all the 4 account managers representing nominee-registered shareholders, i.e., Citibank, Danske Bank, Euroclear and SEB have voted in advance on behalf of the nominee-registered shareholders that they represent. And in a while, we will see a summary of votes cast that were submitted to Euroclear Finland, and that summary will be annexed to the minutes under this point 2. Also the number of votes, especially against and abstaining will be read under the corresponding point on the agenda, even if the meeting would not vote on that point. And commenting on the results of the advanced voting, it has been very successful, some 587 million votes have been cast in advance. The company has 769 million votes. So about 70% of the shareholders have already voted in advance and the results of the votes, very briefly, all the items on the agenda have received enough votes in the advanced votes that the items -- the result of the vote is already clear. I will come back to that on point 13 and 18, where there is a little bit more opposition we'll come -- we'll see the numbers -- the figures and their percentages of all votes cast. So much for instructions for voting, and coming back to housekeeping. After the meeting, the coffee will be served. The doors to the cafeteria on the left-hand side will be opened once the meeting is closed. So now we are through at point 2 on the agenda, we go on to point 3 on the agenda, which is election of the scrutineers of the minutes and the supervisors for counting of votes. So this is a large meeting and therefore, I propose that we elect 2 persons to scrutinize the minutes and 2 persons to oversee the accounting of votes. And if this is agreeable to everybody, I would like to ask for your proposals. And I have the microphone, on the left-hand side of the room.

My name is Maya [indiscernible]. I propose that we elect [indiscernible] and [indiscernible] to scrutinize the minutes. And John [indiscernible] and Mikhaela [indiscernible] to oversee the counting of votes. Can i just have the voting card number? [Voting]

Any other proposals? So since there are no others, we elect [indiscernible] and [indiscernible] to scrutinize the minutes and John [indiscernible] to oversee the counting of the votes. And I just would like to check that these persons are present? [indiscernible], are you here? Present. Thank you. And [indiscernible]? Present. Thank you. John [indiscernible]? Present. Thank you. Mikhaela [indiscernible]? Present. Thank you very much, and you agree to these tasks. Thank you very much. Excellent. Should there be no -- as there are no other proposals that we have received, therefore, we confirm that as examiners of the minutes, we've elected [indiscernible] and [indiscernible]. And as for supervisors, we're going to vote, John [indiscernible] and Mikhaela [indiscernible]. Now we move on to the next agenda item that is establishing the legality of the meeting. And this means that we check the Articles of the Association with this respect, regarding convening a general meeting and the location, the date, and we compare that to the actualized, the Articles of the Association provides that this meeting will be held either in [indiscernible] Vantaa. And the ordinary general meeting will be held by the end of June. With regards to the notice, the Article 10 of the Articles of Association determines that the Board will see the notice will be published no earlier than 2 months, no later than 3 weeks prior to a meeting on the company website and at least 9 days prior to the record date which has been the 16th of March 2023. The notice has been promised as decided by the Board on the company website and as a public announcement on the 8th of February 2023, and it can be found if necessary for scrutiny at the Chairman's desk. Further, let us note that this will be also recorded into the minutes that the Nomination Board has updated its proposal with regards to the composition of the Board with public announcement on the 10th of March and then the notice also has been updated with the respect of the science and election of members of the Board of Directors and the respective agenda items, 12 and 13. Otherwise, the notice remains unchanged. Can we agree that the Annual General Meeting has been legally convened and it constitutes a quorum. Any opinions, any comments? There be none. Therefore, we confirm the legality and the co-quorum to be able to handle the agenda items. And then one more item regarding the order before we move into the agenda items. [indiscernible] is recording the attendance at the meeting and the voting list. According to the Articles of the Association again, there are provisions with regards to the attendance and the shareholder must register with the company by the date mentioned in the notice, but no earlier than 10 days before the Annual General Meeting. To be able to vote, the shareholder must be registered on the list, held by Euroclear Finland by Thursday, the 16th of March. Further, the participant who has a finished book-entry account or the shareholder who's got the finished book-entry account has been able to vote in advance, and that also has been considered as pre-registration to the Annual General Meeting provided by, the shareholder has provided the data necessary for registration. As for the nominee registered shareholders, they have been considered to have been registered to the Annual General Meeting if they have been temporarily registered in the shareholder's register of the company no later than the 23rd of March, 2023 by 10 A.M. We have also received data from the current situation from the system of Euroclear Finland, we have represented 4,308 shareholders, both shareholders, the proxy representatives altogether, 252, and the number of shares and votes totals 606,104,826 which represents 78.8% of company's shares. Therefore, the number of advanced votes included, we have slightly less than 20 million shares presented here that which have not participated into the advanced voting procedure. This will be appended to the minutes as a document under this agenda item. Now we are ready to move on to the agenda items proper, and we'll start additionally with the presentation of the financial statements for the 2022 financial period, including the consolidated financial statements, the review by the Board of Directors and the auditors report. These documents have been available for shareholders for scrutiny as of 3rd March. So a few days over the minimum amount required by the Companies Act, which is 3 weeks and they can be found on the company's website as well as also at the headquarters of the company. Now I will give the floor to Matti Lehmus, President and CEO, who will present the financial statements and the review of the year 2022. CEO Lehmus, please the floor is yours.

Shareholders. On my behalf also, I'd like to warmly welcome you to our Annual General Meeting. It is a great pleasure to meet you, our shareholders here today and to give my first review as the CEO of Neste. Together with myself, the company's strategy and business operations are managed by my international and experienced Executive Committee consisting of 5 business directors as well as heads of joint operations and the majority of the Executive Committee Team is also present here today. My first year as President and CEO of Neste is soon to be over. The year 2022 was challenging, but successful for us. We continued determinedly executing our strategy despite the turbulent operating environment. Our entire personnel was committed and the cooperation with our customers and partners, enable an excellent operational results. We made significant progress in our strategy execution also. We promoted our renewable business with its growth projects and expanded our raw material base. We also adjusted our oil products business and showed our flexibility when we stop the use of Russian crude and natural gas and invested in the development of new business platforms at the same time. This work will continue strongly from now on as well and we are ambitiously developing both business profitability and the strategic growth of the entire company. Next, I will go through aspects of our operating environment. The year 2022 brought unprecedented changes and uncertainty in geopolitics and macroeconomics. These has caused significant challenges around the world. Russia's invasion and war in Ukraine has caused human suffering and affected many people's lives. The war already lasting for more than a year has also had a significant impact on the international energy market. Energy prices increased sharply during the spring of 2022, reflected also in the prices of both crude oil and oil products, but also with electricity, natural gas and renewable raw materials and products. All these factors impacted significantly on our business. In this challenging situation, however, we were able to achieve quick solutions. We managed to replace the use of Russian crude oil and natural gas with other raw materials very quickly. This was possible as we had invested on a long-term basis in technical and commercial flexibility and in the expertise of our personnel. Raw material prices increased clearly in last year, in the spring, reflected also in the high consumer prices of products. The price development [indiscernible] nevertheless, and reversed during the end of the year and crude oil prices, for instance, return to level close to those seen at the beginning of the year, with expectations of a slowdown in global economic growth, high inflation and tighter monetary policy affected the outlook for demand. To ease the upward pressure on consumer prices, some countries such as Finland, lowered the biofuels blending mandate. However, the longer-term climate targets have not been abundant and therefore, for instance, in Finland, the decrease is planned to be temporary. Despite the challenging and unpredictable year, we were able to quickly adapt to changes in our operating environment and above all, to secure the uninterrupted operation of our productions supply chains. Next, I'll speak about safety. Safety is the foundation of everything we do at Neste and we want to lead everybody to an accident-free future. The safety of our employees, partners and our operations is of top priority for us. With regards to safety, 2022 was not in line with our targets as we fell short of goal of continuous improvement. As we can see from the slide, total recordable incident frequency rate at Neste was higher compared to the same period last year whereas, our process safety event rate was at the same level as in 2021. We've launched a number of additional measures and projects to improve our safety performance, and they focus on contractor safety, process safety and safety management. Continuous improvement of safety will be one of our main targets also this year. Next, I will turn to a review of the company's key financial targets, which are comparable return on average capital employed, the ROEC and the leverage ratio. In 2022, we reached our financial target level clearly. Our comparable return on average capital employed was 30.1%, while our target range is above 15%. Leverage ratio was 13.9%, clearly below our target of 40%. Further, comparable EBITDA is our key financial metric, and it reached last year EUR 3.537 billion which is more than 80% growth compared to the previous year. Sustainability is strongly connected to the core of our business, and it is the foundation of our growth strategy in Neste. In line with our sustainability vision, which we announced in 2021, Neste continues its development towards the carbon neutral value chain and our targets for biodiversity, human rights, the entire supply chain and raw materials. Our customers and stakeholders expects us of sustainability and the demand for concrete actions are constantly growing, and we wish to continue to be the pioneer in creating solutions to these issues. Our target is to reduce our customers' greenhouse gas emissions through renewable and circular solutions by at least 20 million tonnes of carbon dioxide equivalent annually by 2030. We are well on track with this target, and we helped our customers reduce their greenhouse gas emissions globally by 11.1 million tonnes last year, equaling annual emissions from 4 million passenger costs. We made also progress in our commitment to reach carbon-neutral production by 2035. For example, at the Porvoo refinery in Finland last year, we switched into using 100% renewable electricity and promoted our neuro hydrogen projects. Our third target for the entire value chain is to reduce the intensity of use phase emissions from products sold by 50% by 2040 compared to 2020. And we made several investment decisions to increase the renewables production capacity. And at the same time, we are studying possibilities to replace crude oil with renewables and circular feedstocks at the Porvoo refinery. I'd like to mention 2 examples of leading external bodies recognizing us. First and foremost, Neste has been included in the Corporate Knights Global 100 Index, the 17th consecutive year and ranked on the 29th in the index and 1st in its own sector. Neste was also included the 16th consecutive time in the Dow Jones Sustainability Index, which also is 1 of the most important and leading global sustainability indicators. And of course, we are very proud of these recognitions. Shareholders, I will now turn to the main elements of our strategy and the progress we made in them in the past year. Our strategy, taking charge of change is based on our vision that demand for low carbon solutions will grow in the long-term, both in businesses and consumers. Our goal is to be the global leader in renewable and circular solutions in the selected areas. Through our strategy, we also want to respond to a rapidly changing market environment and increasing competition. Our strategy has 4 key themes; firstly, we continue to grow in selected renewable and circular solutions. The key elements of renewable growth are increasing our production capacity, expanding our waste and residue-based raw material supply and opening new market segments with a particular focus in the coming years on renewable aviation and renewable raw feedstock for polymers and chemicals. Secondly, we will also focus on creating new markets in the long term. The adoption of new technologies to expand our raw material base is a key theme, which supports our long-term growth. Also geographic expansion is part of this strategy and we expect, for example, that the Asian market will gain importance in the long term as the markets for renewable aviation and renewable polymers grow. Thirdly, we will strengthen areas where we can differentiate from our competitors and create value in -- when competition increases. Our differentiation focus is on strengthening our selected capabilities, such as our ability to work with challenging raw materials and developing and optimizing our global supply chain. Because these are areas where we want to maintain competitive advantage that we built over a decade already. The fourth important area is strengthening our foundation to support growth and efficiency. In addition to safety, the key areas here are, for example, the utilization of data and digitalization to automate our processes. The continuous improvement of our efficiency and managing the complex supply chain is an important part of our strategy. In our renewables business, we took significant steps last year in growth projects to expand our renewables production. Our aim is to double our production capacity in the next 4 years. And 2 of these projects will be launched during this year. The year, 2023 will be a very important year of growth as we increase our renewable production capacity by more than 50% by the end of the year. We are currently living interesting times because the expansion of our production capacity of renewable products in Singapore reached mechanical completion in late 2022, and we aim to launch the expanded plant in the coming weeks. In Spring '22, we also announced a 50-50 joint operation with the U.S.-based Marathon Petroleum. The joint operation will produce renewable diesel in California and it is expected to increase Neste's annual production capacity of renewable products by just over 1 million tonnes by the end of '23. This project is also in an interesting phase as the first stage of production has just started. In addition, last summer, we also decided to invest EUR 1.9 billion in the expansion of the Rotterdam refinery, which is expected to be completed by 2026. This project will increase Neste's total production capacity of renewable products by 1.3 million tonnes per year and significantly improve our ability to produce sustainable aviation fuels. As part of our strategy work, we also launched a strategic study in the autumn on a potential long-term transition of our refinery in Porvoo to be a globally leading renewable and circular solutions site while also studying the possibility to replace crude oil with alternative feedstocks in 2030. Second important area in the execution of the strategy last year, what's the growth of the sustainable aviation fuel business? We entered numerous partnerships and collaborated with leading airlines, of which many have said targets to use sustainable and renewable fuels. Among the airlines, I can mention examples from different parts of the world, such as Air France, KLM in Europe, United Airlines in the U.S., and Singapore Airlines in Asia. Other important partnerships included the aircraft manufacturer, Airbus, and the transport company -- or several transport companies, such as DHL Express. A very important part of our strategy was growing our renewable polymers and chemicals business, and among our key achievements, we're building new supply chains in collaboration with international partners such as Covestro and Mitsubishi Corporation. As a concrete example of collaboration between many partners, it's when our end customer launched a range of baby strollers made of bio-based plastics. We also continued our development work on chemical recycling by conducting several test runs with liquefied waste plastic at our Porvoo refinery and promoting a feasibility study for waste liquid section plant together with our partner. We strengthened our global sourcing of renewable waste and residues through acquisitions in summer 2022. For example, we acquired Walco Foods in Ireland, which is a company that focuses on the sourcing of animal fats. And in late '22, we bought the sequential company on the West Coast of the U.S., which focuses on the collection and sourcing of used cooking oil. To further develop our raw materials, logistics covering over 50 countries, we expanded our terminal network and the previously acquired Rotterdam terminal. Then some words on our financial performance in 2022. Neste ended the year '22 with an excellent result in all businesses. The full year comparable EBITDA for renewables was strong, EUR 1,762 million with a 20% increase from the previous year. Demand for renewable diesel remains strong and despite the rising raw material and production costs, we were able to increase our comparable sales margin year-on-year. Sales volumes in renewables were at the same level as in the previous year. But the share of waste and residues of renewable materials continued to increase, averaging at 95% in '22. The full year comparable EBITDA for oil products was EUR 1,654 million, increasing by EUR 1.3 billion from the previous year. Key product margins improved significantly during the year, resulting in a significantly higher total refining margin than in the previous year. During the year, we were able to successfully secure the continuity of production despite the changes in raw materials and the impact of rising production costs was mitigated by optimizing the supply and use of utilities. The full year comparable EBITDA for the Marketing & Services segment was EUR 126 million, an increase of 22% from the previous year. Despite the overall decline in market demand, our unit margins were strong, and we increased the market shares of our key products. In addition to the result, we focused on managing working capital and expenses as well as cash flow in all our businesses, which is important considering the significant ongoing growth investments. I will next turn to our reserves and development activities. Innovation is a key part of Neste's business development. In 2022, our investment in research and development increased to EUR 85 million, an increase of approximately 1/4 from the previous year. We invest the majority of our annual research and development expenditure in the development of future raw materials and technologies that enable their use. Approximately 1/4 of our personnel work in innovation, research, product development and design. In the short to media term, our aim is to increase the availability of lower-quality waste and residue raw materials. And in the long term, we will study selecting new technologies, which have a significant potential to expand our raw material base, renewable hydrogen and e-fuels based on it, lignocellulosic waste and residues, algae and municipal solid waste are all interesting options, and we study the possibilities to scale these technologies profitably on an industrial scale. As a concrete example of our research and development, I can mention that we have built a demonstration facility for renewable hydrogen production at our Rotterdam refinery in the Netherlands, and we are also exploring an industrial scale renewable hydrogen project at our Porvoo refinery. To strengthen our research, development and innovation, globally. We opened an innovation center in Singapore. It was launched in early -- It will be launched -- It was launched early this year, and it drives collaboration with our partners in Asia. The international growth of our company has continued strong. Neste has a number of employees of about around 5,200 of which nearly 30% work abroad. At the end of the year '22, our company employees represented 68 different nationalities. We invested strongly in the development of our personnel and strengthening our shared operation -- joint operation and culture. In developing our capabilities, specific focus has been placed on strengthening our production and supply chain, taking into account future expansions, execution of complex investment projects and the utilization of digitalization. Neste's shared values and our committed personnel are a key success factor on which we build our future. I would wish to thank our personnel and the company's Board of Directors for excellent collaboration. A strong shared commitment has enabled a strong profit development and the execution of our strategy in the midst of a challenging market environment. Shareholders, our aim is to become a global leader in renewable and circular solutions. This guides Neste's development into the future and inspires our personnel to develop solutions for our customers. This year, we will be celebrating the 25th anniversary of Neste, which consists of several development stages and business changes over time. With these achievements, we have created value for you, our shareholders and to other stakeholders. I'm confident that Neste is in a strong position to continue its successful transformation journey and to deliver on its purpose, which is creating a healthier planet for our children. Finally, I would like to thank you, the shareholders, for your confidence in the company and the active dialogue we've had with you during this year. It is a pleasure to see so many of you here today and as well as those who are participating remotely. Thank you very much.

Thank you, CEO, Matti Lehmus, for the review of the year 2022. Before we move into discussion regarding the financial statements, we will also go through the auditor's report which has been dated on the 7th of February, 2023 can be found on the company website publication. So in the English version, 258, 261 page numbers. Leenakaisa Winberg, VPA, the auditor with principal responsibility of the company from KPMG Oy Ab, is now asked to present the audit process and the audit report with key audit matters. Leenakaisa Winberg.

Shareholders. My name is Leenakaisa Winberg. I have worked as the auditor with principal responsibility of Neste for the financial period 2022, and I represent KPMG audit firm. In my presentation, I will go through the audit and how that was implemented in Neste for 2022. The key audit matters and also the opinions we have given in our auditor's report. Our work was concentrating on the key business units and the key operating countries, meaning that we have audited 6 countries in addition to Finland, Sweden, the Netherlands, Switzerland, Singapore and the U.S. According to the provisions with regards, the audit we report officially to the Audit Committee and for 2022. Our audit plan as well as also the report on progress of our audits have been presented quarterly to the Audit Committee in addition to the reports with regards to the internal control environment and also the observations on the audit of the financial statements. We have also had experts participating into the audit, and we have used such expertise with regards to the IT systems, taxation, the financial statements of the financial instruments as well as also with regards to valuation. During the audit, we have regularly met with the CEO, with the Chief Financial Officer, and business Directors and Management. We've also participated in the Board Meeting and presented a summary of results of our audit. Could I get the next slide, please. Thank you. The directive of the European Union regards to the audit stipulates that the auditor of a listed company must present the key audit matters they consider and how they impact on the audit. For 2022, in our audit, there were 3 such key matters. First was the joint arrangement with Martinez Renewables together with Marathon Petroleum Company. And this transaction was important in terms of money, but also important for the presentation of the financial statements and quite exceptional. It is about joint operation where neither of the owners have -- neither of the owner has a dominant mandate to decide on the company, but it is done together, and the results are also shared equally. In our audit, we have checked against the IFRS rules, but also together with our valuation specialists who have been involved in assisting us in evaluating the amounts of cash flow in the balance sheet. And we've also heard our specialists with regards to certain joint operations and how we have been reporting on those. The second key matter is applicable to biofuel credits, in particular, in the U.S.A., which are related to the important sale of renewable fuels in the USA. And these have to be recorded appropriately, which also means that the amount of renewable fuels must be registered thoroughly and also following the pricing of such credits. And we've gone through the process of the company, evaluated that with regards to such amount and also checked the amounts recorded together with the amounts held by the respective authorities. And we've also checked the values comparing them to the market prices. The third key audit matter was valuation of inventories in the Renewable Products segment, where the inventory is valued in particular with the market prices of the raw materials and also how different types of raw materials also are divided as part of the purchase procurement of different feedstocks. Inventory valuation is important, and we have tested, for instance, the controls with regards to the valuation process and also we have evaluated the calculation practices and also how appropriate the data is in the financial statements. As to our conclusion and general opinions, we have presented that the company [ completed ] financial statements give a true and fair view of the group's financial position and financial performance and cash flows in accordance with the international financial reporting standards as adopted by the EU. The financial statements give a true and fair view of the parent company's financial performance and financial position in accordance with the laws and regulations governing the preparation of the financial statements in Finland and comply with statutory requirements. Further, in addition to these opinions, we have as requested by the company, given the national voluntary opinions, where we note as follows: we support that the audit, the financial statements will be adopted and the distribution of dividends as proposed by the Board, we support that the members of the Board of Directors and the Managing Director of the parent company should be discharged from liability for the financial period audited by us.

Thank you. APA, Leenakaisa Winberg, for presenting the auditor's report and the audit, and now we can confirm that we have been presented the auditors' report and the audit as provided by the company's act. And now it is time to discuss, shareholders. I opened the floor with regards to the financial statements. And I can see the first speaker for the floor. We have the meeting officials here, so let us try and follow the order as requested to speak. But should there be minor problems. Please do not get concerned, you will all be able to speak who also request the floor. So please, at the microphone #2.

Chairman, at the freeze number, 158. Thank you so much to management and all the personnel. The journey of this company, it is fine to follow it. The vision, strategic and operative operations are all top-notch international level. Questions. First of all, the Singapore 2 and Martinez plant. Did I understand correctly that Singapore 2 is a bit delayed as far as launching is concerned. And then for both plants, what is the timing to run on full capacity? And will it enter the markets with the same timing? My second question concerns the financial targets and return on capital employed. In the past 4 years, as you said, you've been doing better than moderately. So the question is, is there some ambition lacking for the future? Do you want to give such a pessimistic outlook to investors that profitability is going down in the future?

Thank you for the question. It will be the CEO, President, who will advise that.

Thank you for these questions. I will start with the first one. concerning the extension of Singapore and Martinez. In [indiscernible], Singapore extension, the mechanical completion was by the end of last year. The plan is that we launch it in the first quarter. We are close to it. Preparations are running smoothly. And I could say that it is in coming weeks that we start production there, but it needs to be safe, of course. Then capacity -- running full capacity that is something that we are preparing towards, one of our main goals today, of course, we talk about safe, the running of capacity but also that we increase sales and supplies, and we do it as quickly as possible. That is my main goal for this year. Then you talked about financial targets, the long-term target for capital employed is a minimum 50%, so we will work for growth and profitability as we have been over the market in the past years.

Then the next question at microphone number one. please?

Thank you. [indiscernible] is my name, 467 is my voting card number. One, thank you to the president, your first review was excellent. Let's see if you can ever be better than that. Mr. Kahkonen and Mr. Lehmus, you can know, both answer my question, which concerns our future strategy to 10 to 30 years from now. So the 1,762 is the EBITDA and we live on, of course, renewables because oil products are going down. I'm a bit worried how far this will suffice? The green transition is speeding up. There are hydrogen cars, electric cars in 10 years, I think we won't have any other. How are you prepared for this transition, what does green transition mean for fossil, raw materials? Are they going to be dropped altogether? Then is biodiesel part of the green transition or is it part of greenwashing? What about biodiesel, Is it fossil, half fossil or none of that? Did you get my [indiscernible], I suppose.

So both Mattis were addressed. Is it -- who stands Yes, seniority first.

Thank you for this good question. Matti junior when I answer in more detail. As the work in the Board is described, we do spend a lot of time looking into the future in long term, we have an even at score to watching at 2040, 2050? And what we should decide today so that by then, we are still competitive. So in that sense, the offering of Neste is good. So we have long-term developing businesses in the polymer chemicals and aviation is just about to come in the innovation. So we use a lot of time to look far away into the future.

Thank you. And I'll continue this before answering the second question. It is true if we look today, we're part of our renewable sales, it is to road transport solutions. And this will be an important sector for the long term, although cars will be electrified, but heavy vehicles will be an important sector, and we need to take care of old stock. And we also create new markets like aviation, renewable polymers where, for example, electrification is much more difficult. To your second question, in the renewables business, we knew renewable raw materials and renewable fees, diesel is not fossil. It is renewable. If we look over the life span, it will bring down about 80%, the cost of raw material.

Then microphone #4.

[ Erkkila ] is my name, voting card 95. Indeed, each shareholder should be proud of Neste now being a pioneer as the whole world is thinking of how to replace fossil fuels with renewables or biofuels, whatever you want to call them. And the previous one already took away my question, perhaps. But it is related to the renewable hydrogen, which is perhaps a question of terminology as well. Is this about having water as raw material? And with renewable energy, it will be broken into hydrogen and oxygen. And then the hydrogen will be captured together with carbon dioxide and we get the so-called synthetic fuels out of that. As a result, is this what this is all about? If I have understood it right, there is a pilot plant which will produce renewable hydrogen.

Thank you for this question. And indeed, we can read a lot about me in the media for about renewable hydrogen terminology as well. Is this about having water as raw material and with renewable energy, it will be broken into hydrogen and oxygen. And then the hydrogen will be captured together with carbon dioxide. -- and we get the so-called synthetic fuels out of that. As a result, is this what this is all about. If I have understood it right, there is a pilot plant. -- which will produce renewable hydrogen -- thank you for this question. Couples. Thank you for this question. And indeed, we can read a lot about me in the media for about renewable hydrogen. And as you described, we make use of renewable electricity and then use water to with biochemical processes to produce renewable hydrogen. And there's another debate related to that, that it is possible to further process this as fuel for electrical vehicles, but that needs further processing then. Thank you. Then we have another speaker at the microphone #1. Call voting ticket 130. Regarding the CEO's review, you could see the objectives for future and the plans. And in relation to that, also how important innovation and research activities are. But then he mentioned the amount for product development that is allocated. If I heard him right, it was EUR 84 million. I am astonished by that. Did I hear this right or wrong, I would hope it'd be relatively much bigger. It should be according to the objectives -- thank you. CEO, Les, please. Thank you for your question. As said, the amount was EUR 85 million, if I recall it widen we've increased the amount compared to the previous year. And we concentrate on selected technologies. It is good to note that in addition to the development contributions, we also invest strongly on growth products. So these both are important for our strategy. Thank you. Then let us take a speaker from microphone 2. I think it was onto a shareholder who has requested for the flow, indeed, to person voting ticket number is #25. I asked that CEO would tell us how much last year or the share of raw materials for renewables that was palm oil? And how would you consider that developing in the future? And then as you presented, the accident rates, I'd like to know how widely the sourcing of raw materials also included into the data for incidents.

Thank you for your question. So indeed, with regards to the raw materials last year, we increased the amount of waste and residues up to 95%, meaning that the remaining amount, 5% has been plant oils and the majority of that palm oil. And at the same time, we've also announced that during 2023 we'll give up totally the use of palm oil by the end of the year. The next question pertaining to LTIFR figures and where we follow the whole supply chain -- and if we have made acquisitions, these also have been taken into account. For instance, this year, we also reported such companies, which we have acquired during the recent years. Thank you.

Then next speaker at the back at the microphone #5. [indiscernible] limiting voting ticket #152, CEO mentioned in his review the chemical recycling of waste plastics and certain tests. And in your annual report, you also touched upon this a bit. In relation to that, my question then, how do you see the volume of such waste plastics would be in Finland and also globally. And what would be your investment schedule on building up such a plant?

Thank you to your question. With regards to chemical recycling, we consider it as a very important interesting alternative whilst reducing emissions or we do not speak up on renewables but circular solutions when we use waste plastics as raw material. As a long-term vision, we see that in 2030, we could handle million tonnes of waste plastics. This is a work in development, which is ongoing, and that is our vision. Looking at the schedule, currently, we are both developing the technology and also making profitability calculations of such a plant, and we'll continue certainly that work in future years.

Then Microphone 6. I apologize for you having to wait for a bit. My radar is a bit out of order.

[indiscernible] is my name, voting ticket 307. I understood from the documents to the Annual General Meeting that your intention on a midterm plan is to close down the production of crude oil in the Portable refinery. Do you consider that respective EBITDA could be produced with renewables in the future.

Thank you for your question. Indeed, last autumn, we announced that for a long time basis, we clarify the opportunity to transfer portable to convert the power refinery to be a significant production plant for news and it could be about 2 million to 4 million tons, an important scale globally. And at the same time, we also continue the possibility on a midterm basis to give a fully crude oil, and we still continue to analyze that.

Thank you. Any other requests? Could I get the microphone 3, to the speaker. Chairperson, voting ticket #178. The European Union has decided that fossil fuels will be prohibited for passenger cars. But now at least from Germany, we have understood that only synthetic fuels, be accepted have renewables, biofuels being also prohibited or has net not been lobbied enough.

Thank you. Indeed. During the last weeks, we've been able to follow how the debate has gone with regards to the regulation in the European Union. And according to our latest knowledge, the electric fuels would be allowed even after 2035. And now the reference is made to e-fuels, for instance, those that have been processed from green hydrogen. And naturally, we continue analyzing this with regards to new technologies.

Thank you, Jan. Perhaps I am slightly slow in understanding, but thinking of my first question, I wasn't getting a complete answer. If we think of wind power and we produce hydrogen with that and also then that the times won't explode. So how has Neste prepared itself. Theoretically, thinking of aviation, heavy transportation, they'd all be using hydrogen electricity in future. So how should we put this into relation of renewables. So will that become totally insignificant. So I have to rephrase my question now. So what is your strategy with this regard? Are you going to develop hydrogen. And if you think of renewable diesel fuels, they'd be totally taken off the market. So we'd be totally standing on a void.

Other clarifying answer from CEO.

Yes. To specify, according to our vision, we'll be needing different low-carbon solutions. -- the need for decreasing emissions is important and even continues further after 2030. So we will need both hydrogen, electrification, also liquid biofuels and cells for engines. So therefore, taking new technologies to use there are different schedules of course, for passenger cars, electric vehicles will come faster and for heavy traffic and heavy vehicles that will be in a different scale and aviation fuels will be an important part of the solution on a long-term basis. Although we will develop new technologies, too. So this is with respect to biofuel.

Any other requests? Could I get the microphone to the sent to the microphone #2. Thank you, Chairman. Voting #254?

Biden launched a 2,000 billion green transition financing. What is Neste's plan and how are you going to benefit from that funding to you? What is the longer-term objective in the U.S. markets? Of course, they are making headway in renewables. Thank you.

Thank you. Concerning the USA, it is true that federal but also on a state level, they have growing targets to reduce emissions an IRA package published last autumn involved elements of tax reliefs for biofuels. A new thing was that also renewable aviation fuels will have a tax relief which is also important for Neste. And the regulations involved that these credits will be moved to local producers by 2040 and it's important that we have production for operations in the U.S. through this joint operation.

Anything else on 2022 on the financial statements? If not, then I thank the shareholders for a very fruitful discussion, good questions. We can say that for point 6 is now discussed, then point 7 is the adoption of the financial statements in their report, the auditor when she presented the auditor. They have given the following opinion that the consolidated financial statements give a true and fair view of the group's financial position and financial performance and cash flows in accordance with international financial reporting standards and the financial statements give a true and fair view of the parent company's financial performance and financial position in accordance with the laws and regulations governing the preparation of the financial statements in Finland and comply with statutory requirements. In addition, the auditor stated that they are in favor of the financial statements being adopted. I open discussion on this on adoption of the financial statements. No comments. The financial statements, which include the consolidated financial statements have thus been adopted. It will be recorded in the minutes that shareholders who voted in advance around 340,000 shares and votes were against this adoption and about 5.9 million shares and votes abstained under this item. These votes come from the nominee registered shareholders. So Point 7 is complete now. Then on to Point item #8-- number, the nicest one, which is the use of the profit shown in the balance sheet and deciding on the payment of dividend. And here, I would like to give the floor to Matti Gaskin and Chairman of the Board, who will explain the payment.

Our policy in Neste is to pay out at least 50% of our profit for the period as dividends distributable earnings of the company as of 31st December 2022 totaled EUR 3.824 million. And there has been no key changes in our financial position after the closing of the period. The Board proposes to the annual meeting that for 2022 based on our balance sheet. We pay out EUR 1.02 per share as an ordinary dividend. Altogether, EUR 1.27 into installments. We further proposed that the Annual General Meeting authorized the Board at its discretion, to pay EUR 0.25 per share as an extraordinary dividend by the end of October 2023, and the Board would pay this discretionary second or fixed dividend unless there's a significant deterioration in the business during the financial year 2023. The first installment, EUR 0.51 per share and the extraordinary dividend of EUR 0.25 per share, altogether, EUR 0.76 per share be paid to shareholders registered in the shareholder's register of the company. First day to 30th of March 2023 in the register maintained by Euroclear Finland Limited. The Board proposes to the Annual General Meeting that the payment date of the first installment of the ordinary dividend and the extraordinary dividend be paid on Thursday, 6th of April 2023. The second installment of the ordinary dividend, EUR 0.51 per share will be paid to shareholders Weiser on the record date for the second installment of the ordinary dividend, Friday, 29th September 23 and recorded into the listed shareholders, maintained by Euroclear Finland Limited. And the Board proposes that the payment date on the second installment of the ordinary dividend would be Friday, 6th of October 2023. And the Board is authorized to set a new dividend record date and payment date for the second installment of the ordinary dividend in case the rules and regulations of the finished book and resistant be changed or otherwise so required. The Board notes to the Annual General Meeting that if the Board decides to pay the second external dividend by virtue of the authorization, the intention of the Board is to set the record date and payment date for the second extraordinary dividend payable on the basis of the authorization so that the dates are the same as for the second installment of the ordinary dividend. Chairperson, this was my proposal. Thank you.

Presenting the proposal for dividend. Based on this introduction, I open the floor for discussion with regards to the proposal made by the Board and first, [ Hanine, ] which is to take the floor. The floor is yours.

Thank you,. I am surprised as in many years, I've been a bit unhappy as Neste has paid such a poor dividend, so we can see a clear improvement here. My question to Matti Kahkonen is as follows: how about if you'd like to rate on a scale from 1 to 9, how probable it is that you will pay the second extraordinary dividend -- what...

Thank you for your question. As I said, if there are significant deteriorations in the business environment. We will not pay it, but it is difficult to rate it what the significant deterioration is, but it is related to the general geopolitical instability and instability in the world. In general, and it's difficult to know the situation taking place later in Autumn, but we see how the world goes.

I recommend for the next term that you put up your candidacy for the next parliamentary elections. As a good answer it was. I don't think there will be any parliament election says the Chairman of the Board. But yes, it was said traditionally continue this way. As the policy -- dividend policy was so good.

Thank you. Let us continue. Any other speakers wishing to take the floor. If there aren't, I note that discussion is closed for this agenda item, and we have adopted the proposal for dividend. And then we'll also note approximately 280,000 have both the proposal for one reason or another and 5.3 million shares have not known whether they say yes or no. Therefore, we confirm that we have handled the agenda Item 8. We'll move on to the agenda item 9, which is about charging the members of the Board of Directors and the President and CEOs from liability. It is noted that the auditor has supported that the members of the Board and the Managing Directors of the parent company should be discharged from liability for the financial period 2022. And the decision is applicable to the following persons: Matti Kahkonen, Chair of the Board; Marco Wiren, Vice Chair and the following Board members, John Abbott Nick Ensley, Montinola, YaraRusendal, Johanna Sudeste, John, Availa, Jean Bateen and as President and CEO for the year 2022, we have had Beta until the 30th of April and Matti Lehmus as of the 1st of May. Let us confirm and recording to the minutes that the Board members and process that have acted as the President and CEO at is qualified in the handling of this agenda item. And therefore, not being able to cast any votes on this. I open the floor for discussion with regards of discharging of liability, and I close it, and we note that we have granted this charge for the year 2022. And we record into the minutes, also the advanced votes approximately 7.5 million shares have opposed the proposal, approximately 10.4 million shares have announced that they abstain. And we move on to the agenda item 10 which is the remuneration report. And the Securities Market Act provides that listed companies publish a remuneration report every year, including information on the remuneration of Board members, President and CEO; and the potential acting CEO and -- for the company's Act provides that a listed company shall decide in the Annual General Meeting on the adoption of the remuneration report, and this decision is advisory. According to the Securities Market Act, the remuneration report shall be published no later than 3 weeks before the Annual General Meeting. And for Neste, this was made on the third of March as a public announcement and also on the company website. According to the notice, the Board proposes that the remuneration report for the company's governing bodies for 2022 be approved. And I'll give further the floor to the Chairman of the Board, Matti Kahkonen Gagnon, who will present this remuneration report to the Annual General Meeting.

Thank you, Chairman. Is 10 shareholders, next is the Chair of the Board of Directors and the Chair of Personal and Remuneration Committee, I'll give you a review of the remuneration of Neste managers and key employees. The task of the Personal Remuneration Committee is to ensure that Neste remuneration schemes reflect our long-term emulation principles, which are -- and you can see that on the slide to ensure strategy execution, drive performance and value-based behavior, encourage individual and team accountability and be fair and transparent. And next, I'll present different parts of the remuneration of the CEO in more detail. The remuneration of the CEO is composed of a fixed annual salary, including the basic salary and fringe benefits and variable pay components such as short and long-term incentive schemes. The fixed basic salaries time in relation to the complexity and impact of the position and the personnel performance. A significant part of the remuneration of the CEO and the members of the Executive Committee and key employees is based on variable pay components and that is intended to ensure that performance and remuneration remain closely linked. Our short-term incentive scheme encourages individuals to achieve the key operational targets that are significant, considering our strategy. Unless this long-term incentive scheme guides the key personnel in achieving the company's financial and strategic objectives. This scheme is based on the relative total return on Neste shares and the company's impact on greenhouse gas emissions. Moreover, the company's Board of Directors as well that from shares received on share-based bonus schemes members of the executive committee must accrue in their ownership shares in the company to a value equal to their own basic annual salary. Remuneration in its entirety also includes different benefits and they are described in more detail in the remuneration report for 2022 and on the company's website. Next, I'll give you the indicators guiding both short and long-term remuneration. The aim of Neste's long-term remuneration policy is to harmonize the interests of the company management, key personnel and shareholders. This figure here compares the total return on Neste share with the market index during the last 3 years. And based on the graph, we can say that these 2 items have been achieved quite successfully. Short-term remuneration is guided as follows: guided by comparable EBITDA, free cash flow, comparable return on capital employed and our safety indicators. In 2022, our comparable EBITDA and comparable return on capital employed were at an excellent level. At the same time, the year was challenging in terms of safety instead and the Board will, therefore, pay special attention to safety management in 2023. Targets set by the board and systematically guided by the company management and personnel to us the continuous development of operations. Then briefly, a review on the incentives paid in 2022 for which the earning period ended in 2021. Based on the long-term incentive scheme, the -- we paid to EUR 2.5 million the Executive Committee and EUR 6.3 million to other key personnel. We reward our entire personnel for good performance and all our employees are covered by our short-term incentive schemes. Furthermore, Neste employees in Finland are entitled to participate into the Neste personal fund. By our short-term incentive schemes and the personal fund -- we paid a total of EUR 37.8 million based on our performance in 2021. person. This was my proposal.

Thank you Mr. Kahkonen for presenting the remuneration report, I open discussion on the remuneration report. Any comments? The discussion is closed. The AGM has decided to adopt the remuneration report of Neste Corporation. And it will record it in the minutes that advanced vote against around EUR 23.9 million, which was about 4% of the shares represented in the AGM. And then abstentions about 9.7 million shares. And as in the previous items, these votes come principally from the list of nominees to shareholders. Then on to Point 11, well, actually 11, 12 and 13 on the remuneration on the number of members in the Board and the composition of the Board. And I will here give the floor to the Chair of the Shareholders' Nomination Board Metrano, who will present their proposals. Mr [ Stanbic. ] The floor is yours.

Thank you, Chairman, distinguished shareholders, ladies and gentlemen, my name is Maija Sander, and I am a Senior Financial Counselor at the government ownership Steering Department of the Prime Minister's office, and I am the Chair of the Nomination Board of Neste. Today, it is my pleasure on behalf of the Nomination Board to propose -- to present our proposals to the AGM. The Nomination Board of shareholders submitted its proposal to the Board of Directors for the 2023 AGM on January 27 of this year, and we updated our proposal or proposals on the 10th of March 2023. The Nomination Board was appointed on September 6, 2022. The AGM has decided that the Nomination Board shall consist of representatives of the 3 largest shareholders on the first week day in September of the year concerned. And they are the following myself, I represent the government ownership steering Department of the Bio Minister's office, and I'm the Chair of the Nomination Board. Other members Kimmo Sallinen, Senior Vice President, Investments of Varma, Mutual Pensions Insurance Company; Joko Bellona, President and CEO of LiMarilen Mutual pension insurance company and Matti Kahkonen, Chairman of the Board of Directors of Neste. We have studied thoroughly recruitment and of new members. We propose that the Neste strategy has sufficient international business expertise for Neste's strategy. As for the members of the Board, we propose to elect 9 members to the board. We propose to reelect Matti Kahkonen as the Chairman of the Board of Directors. In addition, the current Board members to be reelected John Abbott, Nick Elmslie, Just Jansz, Jari Rosendal, Eeva Sipila and Johanna Söderström. Eeva Sipila is proposed to be elected as Vice Chair of the Board. And we further propose that Kimmo Viertola and Heikki Malinen elected as new members. They will introduce themselves at a later stage. The current members, Marco Wiren and Martina Floel, announced that they were no longer available for reelection. On behalf of the Nomination Board, I would like to warmly thank first of all, Marco Wiren, who has been a Board member since 2015. Marco's long-standing contribution as the Vice Chair and as a member of the Board and as Chair of the Audit Committee has been solid and valuable. I wish to warmly thank him for the work done for Neste. The Nomination Board amended its original proposal on March 10, 2023 after Martina Floel announced that she was no longer available for reelection. The reason for this was a potential conflict of interest relating to Floel other engagements, which had risen after our original proposal. Martina Floel has been a Board member since 2017. And I would like to thank her for her excellent work for the benefit of Neste. All these candidates have agreed to be appointed to the Board, and they are independent of the company. And it's made shareholders, except for Kim Pierola, Director General of the ownership Steering Department in the Prime Minister's office. Concerning the selection procedure of the members, the Shareholders' Nomination Board recommends that shareholders at the AGM vote on their entire proposal. This recommendation is based on the fact that, in line with the Nordic governance model, the company has a shareholders' nomination board, which is independent of the Board of Directors. The Shareholders' Nomination Board task in addition to assuring that individual nominees for the Board of Directors possess the required qualifications is also to make sure that the proposed Board of Directors as a whole has the best possible knowledge, expertise and experience in the interest of the company and that the composition of the Board also meets other requirement of the Finnish corporate governance code for listed companies. Then on remuneration, we explained in our proposal that this remuneration proposal is part of a program which adjusts Neste Board's remuneration to correspond to market levels by 2026. The Nomination Board will annually submit its proposals to this effect to the Annual General Meeting respecting its rules of procedure. Our proposal for remuneration of Board members for the next term is as follows. And you fixed remuneration, we propose the following: Chair, EUR 95,000, Vice Chair vice share, EUR 60,000 Chair of Audit Committee, EUR 60,000. If she or he does not simultaneously act as Chair or Vice Chair of the Board and members EUR 45,000. In addition to the fixed annual remuneration and annual compensation for committee work, as follows, members of the Audit Committee, EUR 5,000 the Chair of the Personnel and Remuneration Committee, EUR 6,000 for the task and the member, EUR 2,500. And the Chair of any other committee set up by a Board decision EUR 6,000 and to members EUR 2,500. In addition to annual remuneration, the Board members will be paid for attendance in Board and committee meetings as follows, you can see them in the board. We propose that 40% of the fixed annual remuneration will be paid in the form of shares and the remainder in cash. The committee and meeting allowances will be paid in cash. And I would like to add that the Nomination Board made its proposals unanimously. The -- and just to underline that the Chairman of the Board Matti Kahkonen did not take part in the decision-making when the Nomination Board made its proposal relating to the Chair of the Board and the Board remuneration. Chairman, those were the proposals of the nomination board.

Thank you. Thank you, Matrade for the purpose of the Shareholders' Nomination Board and these are applicable to agenda items 11, 12 and 13. We'll handle them item by item in this Annual General Meeting. Therefore, we start by agenda item 11, decided the remuneration of the members of the Board of Directors. And they are now conveniently also on the screen, so I won't repeat them. We could perhaps also tell -- take the slide with the presentation of annual remuneration. So this was the proposal by the Shareholders' Nomination Board with regards to the fees of the Board members divided into annual fees, committee fees and meeting fees and the payment procedure, 40% in shares and 60% in monies. And I open the floor for discussion now. Let us take Peter fleet, if I remember right, by the microphone 2.

Thank you, Chair. Exactly right, voting ticket #58. Typically, I will not take the floor regarding the elimination of the Board, but now straightly speaking, I would say that we do not appreciate the competence and experience of our Board members in terms of bringing value to shareholders. I don't want to stir around this particular proposal for this year. But if the Nomination Board has considered. But by 2026, we like to take these remuneration to a level which is also comparable Internationally, I recommend that you consider taking that step already after 1 year.

Thank you. Thank you for this address. Any other shareholders wishing to take the floor regarding the remuneration of the Board? If there are no further requests let us note that we have closed the debate. And we know that the annual general meeting has resolved to adopt the remuneration of Board members as proposed by the Nomination Board. And we'll record that into the minutes and also the opinions of the shareholders have inverted in advance of approximately 7.74 million opposing and approximately 5.2 abstentions. And again, mainly representing the nominee registered shareholders. Then next item, deciding the number of members of the Board of Directors, agenda Item 12. According to the Article 4 of the Articles of Association, the Board has at least 5 and no more than 10 members. Currently, there are 9 members, and the Shareholders' Nomination Board would board proposal would mean that the number be kept as is, that is 9 members. I open the floor for discussion. With regards to this agenda item, I close the discussion, and we note that we have confirmed the number of members of the Board be 9. Only 12 shares have approached the proposal in advanced voting and approximately 17,000 shares have abstained from voting. Let us move to the agenda Item #13, election of the Chair, the Vice Chair and the members of the Board. I refer to the previous presentation by [indiscernible] back on behalf of the Nomination Board and it is proposed that Matti Kahkonen be reelected as Chair and in addition to himself, reelected John Abbott, Nick. Just Jansz, and Eeva Sipila; and [indiscernible] and Eeva Sipila is proposed to be elected as Vice Chair of the Board and further the Nomination Board proposes 2 new members to be elected. That is Heikki Malinen and Kimmo Viertola candidates. And at this point, the new candidate scheme of Virtanen to present themselves to the Annual General Meeting, we'll start with Malinen.

Shareholders. My name is Heikki Malinen. I am the CEO of Outokumpu, which is the world leading low emission stainless steel producer. It's a great on enjoy to be presented as a candidate for Neste Board. It is a great company with excellent future ahead. A few words of my background, and you can see my CV at the background as well. I worked nearly for 20 years in company management in different positions. Also the last 8 years in the Outokumpu and 2 years as Vice Chair of the Board in the Outokumpu Corporation and half of my life, I lived in different parts of the world. the longest in the U.S.A. for nearly 15 years, will have also carried out my MBA in -- at the Harvard school. So basically, in the heavy industry, and I worked for the forest industry in the UPM for the longest, and I'm also familiar with logistics and now with stainless steel for nearly 11 years of my experience. My interest for Neste is it being a great company, and there are 4 things that are close to my heart, and I'm particularly interested in that is the green transition, sustainable development. The international nature of Neste and I think I can bring also my competence to that. And big planned projects. My industrial background is supporting that. I'd like to thank you for your attention.

Thank you, Malinen. And next Kimmo Viertola, please.

Good morning, shareholders. I'm Kimmo Viertola. I Director General in the Finnish ownership steering department of the Prime Minister office nearly for 5 years in this task, we have faced the challenges both in terms of the pandemic and also the Russian attack the aggressive war against Ukraine. Before this position, I worked in finance investments, both in direct investments, but also in fund investments from representing different sectors and different life cycles of investments joined together by the objectives of strong growth and internationalization. And before that, I worked in the banking sector, both in Finland and abroad in the corporate banking sectors, and I've worked in a global organization as well. For couple of weeks, I still work in the Fortum A Board until its Annual General Meeting, I worked also concentrating on corporate financing and I've also been the Chair of the Shareholders' Nomination Board and Neste is a well-appreciated pioneer in renewables and in the Board. I'd like to be part of the discussion, bring my expertise increase the value of shareholders and also to have a profitable growth for Neste business.

Thank you Director General Kimmo Viertola for your presentation. And now, we have gone through the proposal by the Nomination Board and we've also seen new candidates presenting themselves. Now it is time to have a discussion on the proposal made with regards to the composition of the Board. So we are to elect 9 members. And according to the Articles of Association, the Annual General Meeting also has to has a mandate to elect Chair and Vice Chair of the Board. Shareholders. The floor is yours.

I can see no requests to speak to the meeting. Therefore, we can note that we have closed the debate and the proposal by the Nomination Board has been adopted. The Annual General Meeting has decided to nominate the following persons, reelect Matti Kahkonen as Chair, Eeva Sipila as the new Vice Chair, John Abbott, Nick Else, Estia Jari Rosendal and Johanna Soderstrom, Heikki Malinen and Kimmo Viertola as members of the Board of Directors. Further, let us record the minutes and opposing votes of advanced voting approximately 65 million shares and votes. And then approximately 557,000 abstentions. And before we close this agenda item, I will give the floor to [indiscernible], the Chairman of the Board.

Thank you, Chair. First and foremost, I'd like to thank for the confidence on behalf of the full Board, we are going to do our best in order to be able to succeed even in the future. And we do challenge and support Matti in his position and task. Thank you for your confidence. And in this context, I'd like to also express my warm thanks to Marco and Martina for the excellent work they've done in the Board and also developed the company further. It has been an excellent part. It has been good to work together with you. I'd like to express my greatest thanks to you.

Thank you. We have handled the agenda Item 13. Let us move to the agenda items 14, 15 with regards to the auditor. First, we have to decide on the remuneration of the auditor and based on the decisions of the previous Annual General Meetings, the auditor's fee has been paid according to an invoice approved by the company. As in the notice of the meeting, the Board proposes to the Annual General meeting based on the recommendation of the Audit Committee that we continue as previously, any speakers discussion closed, we confirm that the decision has been adopted. And it has recorded in the minutes against the votes in advance, opposing approximately 12 million. and abstentions approximately 4 million. And we are regarding to the minutes the exact numbers. Item 15, election of the auditor according to the Article 9 of the Articles of Association, the company has 1 regular auditor, which will be an auditing company, and the company will nominate the auditor with principal responsibility was to be otherwise public accountant, the term will end at the close of the next Annual General Meeting of Shareholders in the spring 2021. The shareholders elected KMPG OIAB as an audit firm. The earlier auditor was PricewaterhouseCoopers. And as principal auditor, [indiscernible], APA and as proposed and recommended by the board, we'll continue -- as previously, it is proposed that KMPG will be the company auditor and it has announced that it will reappoint Lenander, authorized public accountant. The discussion is open. And I close the debate this proposal has been adopted. It will be [ rocketed ] the shares against 4.4 million and abstentions around 4 million votes and shares they are less than 1 percentage points of all shares. Then we go to the authorization business. We start with Item 16, authorizing the Board of Directors to decide to repurchase the company's own shares. The substance of the Board's proposal is included in the notice to the meeting, and it has been available to shareholders on the company's website since February 8. And it is similar to the one that was decided in the Annual General Meeting last year. So the authorization to purchase company shares and issue shares are always valid for a year or 12 or 18 months because we want the authorization to be a little bit longer than the 12 months every -- because the date of the Annual General meetings might vary a little bit. So now we are talking about the buyback authorization, the maximum amount is 23 million company shares as proposed, which is equivalent to approximately 2.99% of the company's total number of shares. And this authorization would authorize the Board to decide on buying back the company's shares as a directed buyback in the proportion other than that of the shareholders current holdings. It needs a qualified majority, i.e., 2/3 majority of shares and represented in the AGM. The purchased shares will be used as consideration in possible acquisitions or in other transactions of the company to finance investments contribution to the company's incentive program, or to be retained, conveyed or canceled by the company. And here, I open a discussion on Item 16, which authorizes the Board of Directors to decide to repurchase the company's own shares. [indiscernible]

Thank you, Chairman what was worried once were the Neste would buy back their own shares and then cancel them. That was a worry for me. Think about Nokia. Nokia bought their own shares with EUR 19 billion, then they canceled them if we compare that to the exchange rate of Neste's EUR 14 and Nokia EUR 4. It is not worth buying your own shares to just to cancel them, give the money to shareholders, if you so -- which I would like to ask the Chairman of the Board, whether you ever thought of such a stupid thing? Matti Kahkonen you ever think of such a stupid thing.

Thank you for the good question and comment. Yes. Well, it depends on the company and there are situations. Neste, we thought that it would be good to have a toolbox if we have some acquisitions or mergers and acquisitions. So that was our underlying idea. Any other questions under this point? If not, then the discussion is closed and there are no proposals that came up. So the Board of Directors proposal to authorize them to decide on the repurchase of the company's own shares has been adopted by the AGM. And in advanced votes, they were about 3.7 million votes against and about 33,000 abstentions, although this was a decision requiring a qualified majority, there is no problem because both were about 0.5%, 0.6% of votes cast and shares represented here. So that proposal has been adopted. We go on to another proposal authorizing the Board of Directors to decide on a share issue. So like the previous item of the mirror image of the previous one, the same date, the proposal has been available on the company website since February 8. And in substance, it is similar to the share issue authorization, which is still actually valid. It was granted in 2020. But back then, the duration was 3 years, it would expire on the 30th of June 2023. The duration of the proposed authorization is 18 months. But otherwise, a similar substance -- similar proposal, which means that under this authorization, no more than 23 million shares could be issued, which corresponds to approximately 2.9% of all the company's shares. They could be also given in a directed issue, which means that we need a qualified majority to -- in favor of this proposal. And the shares might be used in acquisitions, other transactions of the company to finance investments or to use them as a share of the incentive program. I open discussion. Any questions, comments? Now I close the discussion. So this proposal has been adopted. And we will record in the minutes that 1.6 million shares were against and about 2,700 shares abstained in advanced voting then we go on to the last point on the agenda, that is the amendment of Articles 3 and 10 of the Articles of Association. The Board's proposal is entirely presented in the notice to the meeting. It has also been available to shareholders since the beginning of February on the company website. The Article 3 is mainly an amendment of a technical nature, cleaning up all references to the earlier legislation. Therefore, it would be as follows, briefly, the company's shares are included in the book and eSecurity system, no earlier reference to laws. And in particular, as the reference was already outdated otherwise, too. As to the Article 10, it is a bit more extensive applicable to the heading, which now is better corresponding to the content and substance as it mentions the notice, the registration and the venue of the General Meeting of Shareholders. And the third paragraph in the Article 10 is the one to be amended and the amendment in particular, is the second sentence that is that the companies act now enables also the remote meetings to be organized, but that -- there is a requirement that this will also be mentioned in the articles of association of the company. And that cause can be decided by the Board that the Annual General Meeting can be organized without venue. So that the shareholders exercise their rights fully to decide timely using a remote connection with appropriate devices, and that is the new proposal. The amendments of the Articles of Association require always a qualified majority. Therefore, the 2/3 of majority is needed of shares represented in the Annual General Meeting and the votes cost. For this proposal to be adopted, I open the debate regarding this agenda item.

I'm looking at [indiscernible] whether he would have something to say. No clear -- was a bit of hesitation there if I interpreted him right. But should there be no other requests to speak about this agenda item. Let us note. That discussion is closed and this proposal also has been adopted. Under this agenda item, the nominee registered shareholders have approached by approximately EUR 133 million, but they represent approximately 23% of cost shares. To date, therefore, they do not have an impact on adoption. Now we have come to a situation where all matters to be handled in the Annual General Meeting have been handled. The minutes will be available within 2 weeks for shareholders scrutiny on the company website. And I'd like to thank the shareholders having since a long time after difficult times, attended the venue, this meeting is much more pleasant than the meetings of the previous years where no such a spirit could be seen. I'd like to thank the management of the company for good arrangements. And now I declare this meeting closed. [Statements in English on this transcript were spoken by an interpreter present on the live call.]